TIR Implementation in Pakistan

Traffic-in-Transit

IRU Proposed Action Plan

Globalisation of trade is an important challenge for the world economy in general. Increased competition means shrinking profit margins forcing to redefine production, supply and distribution processes and, consequently, to focus on the most efficient manner of moving goods. This increased demand on the mobility of goods is however hindered by invisible burdens such as waiting times at borders, high taxes and connected customs guarantees, an increasing focus on security of transported goods, etc. Transit facilitation is therefore an essential element for competitiveness and economic growth. In 2006, almost 3,200,000 transports were carried out under the TIR System by 40’000 authorised transport operators from 57 countries. The importance played by the TIR System for the growth of the economy is therefore quite obvious and will continue to expand taking into account the revitalization of the Silk Roads, by using the facilities offered by the TIR System.

What is the TIR System?

TIR stands for Transports internationaux routiers (International Road Transport). In practice, it is an international Customs transit system for goods carried by road which facilitates international movement of goods across the borders of countries that have ratified the TIR Convention, while offering a high level of security. The TIR System enables door-to-door transport with minimum interference at international borders of contracting parties to the TIR Convention and thus serves, in the best possible way, international trade and the economies of all the countries involved.

The TIR transit system started soon after the Second World War under the aegis of the United Nations Economic Commission for Europe (UNECE) in order to contribute to the facilitation of international transport initially between a small number of European countries. The success of this limited scheme led to the negotiation of a broader TIR Convention which was adopted in 1959 by members of the UNECE and entered into force in 1960. The practical experience, the technical advances and changing Customs and transportation requirements and the emergence of new transport techniques, the maritime and inland containers, led to a complete revision in 1975 which aimed at rendering the TIR Convention more efficient, less complex, more secure and adapted to intermodal transports. Today, the TIR Convention of 1975 has been ratified by 68 countries all around the world and is currently operational in 57 of the contracting parties, covering a geographical scope from Lisbon to Vladivostok, and from Narvik to Bandar-Abbas.

How does it work?

The TIR System is based on 6 essential principles: secure vehicles or containers, international chain of guarantee, TIR Carnet, mutual recognition of Customs controls, controlled access and IT TIR Risk Management tools (SafeTIR and TIR Electronic Pre-Declaration). After strict selection and approbation from national Customs authorities, the TIR Holder is entitled to use a TIR Carnet. This TIR Carnet, representing both the Customs transit declaration and the evidence of an international financial guarantee, is duly completed and stamped by Customs Authorities who seal the load compartment at departure, and thus ensures the integrity of the load to the Customs Authorities at all successive border crossing points, while avoiding time-consuming inspections or bond deposits at each border.

What are the concrete benefits?

The TIR System is applicable worldwide and constitutes an important transport facilitation tool; it benefits the transport industry by reducing transit delays and costs through minimum Customs interference, as well as simplified and standardised controls and documentation. As a result, it encourages the development of international trade.

For the Customs authorities more specifically, the advantages are that duties and taxes at risk during international transit are guaranteed up to USD 50,000. Furthermore, only bona fide transport operators are allowed to use TIR Carnets, which enhances the System’s security. Additionally, the TIR System significantly reduces the need for physical inspection of transiting goods and dramatically facilitates Customs control and documentation. In addition, the use of internal clearance points for export and import allows more efficient deployment of Customs personnel.

Last but not least, the TIR Convention already provides concrete answers to the new security requirements established by the World Customs Organisation’s Framework of Standards to Secure and Facilitate Global Trade, thus taking into account the increased attention drawn by abuses from criminals looking to cover illicit activities, including illegal migration, drug trafficking, Customs and transit fraud, movement of counterfeit goods and other offences threatening the wellbeing of national societies and the international community.

Additionally, according to Annex 10 to the TIR Convention, the electronic control system (called SafeTIR) provides Customs, through secure connections, with online validation of the status of the TIR Carnet; this SafeTIR system thus dramatically enhances traceability and risk management, since it allows early detection of potential irregularities.

What is the added value for Pakistan?

Located at the crossroads of continents and civilisations, Pakistan, with its ambitions, needs a barrier-free access to the world economy and market so that its competitive trade goods can flow with the minimum transport costs.

It should be noted that Pakistan has land connexions with Iran and Afghanistan, both being TIR Contracting Parties, which are in the course of reactivating the TIR System in 2011.

Moreover, the predicted expansion of the TIR System in the near future will also bring very important opportunities to the Pakistani road transport industry as well as trade. The TIR System has been fully operational in Europe, CIS for a long time and the Middle East for a few years, especially in Lebanon, Syria, Jordan and Kuwait. Final steps are now being taken by Pakistan and China to possibly join the TIR Convention in the near future. Moreover, the governments of Saudi Arabia, Yemen and Thailand are also considering the TIR System as an important tool for the development of their trade.

When these countries join the TIR System, it is obvious that the TIR facilitation will open important corridors for trade in the direction of the Persian Gulf and Indo-China with great opportunities to reinforce its key role as a link between East and West on the path of the recently revitalized Silk Roads.

Road transport has become a vital production tool, driving peace and prosperity. On those grounds, the smooth implementation of the TIR System is crucial. However the successful implementation of the TIR System is also dependant on countries joining other UN Conventions connected with transport and trade facilitation, dealing with issues such as road traffic, road transport of dangerous goods and perishable foodstuff, etc.

IRU is dedicated to assist all involved in this process.

Within the framework of follow up provisions of the Transit Transport Framework Agreement (TTFA), close cooperation has been established between the ECO Secretariat, the IRU and the Government of Pakistan to revive the accession procedure of Pakistan to the TIR Convention.

The hereafter proposed Action Plan is summarising the main steps to be undertaken as soon as Pakistan has deposited with the UN Secretary General the instruments of accession to make Pakistan a TIR Contracting Party.

II. PROPOSED ACTION PLAN FOR THE ACTIVATION OF THE TIR SYSTEM IN PAKISTAN

As soon as the accession instruments have been deposited by the Government of Pakistan to make Pakistan a Contracting Party to the TIR Convention, practical steps will have to be undertaken to actually implement the TIR procedure in Pakistan.

Indeed, prior to being able to use the TIR procedure, a series of actions must be carried out by, on the one hand the Government of Pakistan and on the other hand by the authorized future guarantor and issuer of TIR Carnets in Pakistan as well as by the IRU fulfilling the tasks and responsibilities attributed to it by the TIR Convention and in particular its article 6.2 bis.

Of course, the IRU, in partnership and with the assistance of ECO Secretariat in the framework of the implementation of the TTFA, is committed to assist the Government of Pakistan and the authorized issuing and guaranteeing organization/ Association to expedite these actions.

This Action Plan aims at drawing the attention of the involved stakeholders, including the Competent Authorities, to the initial indispensable steps that have to be undertaken in order to allow the activation of the TIR System in Pakistan. For each action, it indicates the entity responsible and a target date which have to be agreed upon by all stakeholders.

Action

Actors

Target date

Send to the UN Secretary General the instruments of accession of Pakistan to the TIR Convention:

6 months from the date of the deposit of the instruments of accession, without reservation, with the UN Secretary General, the TIR Convention will enter into force in Pakistan.

However, its practical implementation will depend on the actual realisation of the various steps described below.

Government of Pakistan

As soon as possible

Designation of the Competent Authorities responsible for the TIR Convention:

As the Ministry of Transport is the focal point for the implementation of the ECO-TTFA, it would be legitimate that this Ministry plays the leading coordinating role for the activation of the TIR System in Pakistan in close cooperation with the Ministry of Commerce and Industry. The Customs Authorities of Pakistan could in this framework be designated as the implementing Agency for the TIR Convention.

Ministry of Transport

Ministry of Commerce and Industry

Customs Authority

To be defined

Designation of the Pakistani Authority responsible for the approval of road vehicles as per Article 12 of the TIR Convention).

In nearly all Contracting parties to the TIR Convention this role is assigned to a special unit within the Customs services, which is responsible to ensure that every road vehicle used for TIR operations must fulfil the conditions set out in Annex 2 to the TIR Convention. The load compartment of the vehicle should be designed and constructed in such a way that once sealed no goods can be introduced or removed from the load compartment without leaving obvious traces. The load compartment of the vehicle must have been approved according to the procedure laid down in Annex 3 of this Convention. The Certificate of Approval shall conform to the specimen produced in Annex 4 to the TIR Convention. Containers would benefit from the same principles.

Ministry of Transport

Ministry of Commerce and Industry

Customs Authority

To be defined

Confirmation of the authorization of a national issuing and guaranteeing association by the Competent Authorities (Article 6 and Annex 9, Part I of the TIR Convention refers).

The Competent Authorities need to authorize a national Association.

As Article 6 of the TIR Convention requires the national issuing and guaranteeing Association to be affiliated to the International Organization, which is authorised to manage the organization and functioning of the international TIR guarantee system, it is a precondition that the Competent Authorities appoint a national Association that is a member of the IRU.

The Pakistan National Committee of the International Chamber of Commerce (PNC-ICC) is a Member of the IRU since many years.

Therefore, it is recommended that PNC-ICC is confirmed by the competent Pakistani Authorities as the TIR issuing and guaranteeing Association in Pakistan.

Ministry of Transport

Ministry of Commerce and Industry

Customs Authority

To be defined

In order to be authorized by the national Competent Authorities, PNC-ICC must be able to satisfy the minimum conditions and requirements, as laid down in the TIR Convention (Art. 6 and Annex 9, Part I). These conditions include: a sound-financial standing, the proven knowledge of its staff in the proper application of the TIR Convention and absence of serious or repeated offences against Customs or tax legislation.

PNC-ICC Executives to be familiarised with the details of the Action plan to be implemented
(2 days in Geneva)

PNC-ICC, IRU

To be define

Signature by PNC-ICC once confirmed authorised as issuing and guaranteeing Association in Pakistan of the contractual Deed of Guarantee with the Pakistani national Customs Authorities (Annex 9, Part I of the Convention)

The IRU will provide a standard Deed of Guarantee which has already been signed and implemented in several TIR Contracting Parties.

IRU

To be defined

PNC-ICC should sign the “standard” Deed of Guarantee with the National Customs Authority, which should set out, in clear terms, the liabilities, responsibilities and the procedures arising from the use of TIR Carnets on the territory of the country of Pakistan.

PNC-ICC and Customs Authority

To be defined

Signature by PNC-ICC of contractual documents with the IRU concerning the issue and guarantee of TIR Carnets in accordance with TIR Convention (Art 6, Explanatory Note 0.6.2 bis to the TIR Convention.)

PNC-ICC should sign with the IRU the Deed of Engagement and its operational Manuals and connected Annexes and addenda. These standard contractual documents signed by all TIR Associations are describing in detail the liabilities and responsibilities of the Association and their TIR Carnet Holders vis-à-vis the IRU and the international chain of guarantee, whereby:

PNC-ICC and IRU

To be defined

The Deed of Engagement is the main contractual document between the Association and the IRU;

The Association TIR Manual is the procedural step-by-step guide for national Associations as to how to perform their day-to-day duties and TIR Carnet management;

The Declaration of Engagement is the main contractual document between the national Association and its TIR Carnet Holders. It describes the main liabilities and responsibilities of the TIR Carnet Holders towards its national Association and vis-à-vis the international guarantee chain;

The TIR Carnet Holders Manual is the procedural step-by-step guide for TIR Carnet Holders as to how to perform their daily work and to satisfy their obligations towards the national Association and the international chain of guarantee.

Establishment of a National Authorization Committee to select transport companies authorised to use TIR Carnets (Article 6 and Annex 9, Part II refers).

It is recommended that the national Competent Authorities, Ministry of Transport, Ministry of Commerce and Industry, Customs Authority, Ministry of Interior, any other interested Agencies, in cooperation with the national issuing and guaranteeing Association PNC-ICC, create and form a National Authorisation Committee, which should ensure that every transport operator wishing to use TIR Carnets meets the minimum conditions and requirements. These requirements and conditions must be met at all times and if this is not the case, the national Association may suspend issuance of TIR Carnets at any time and the national Competent Authorities can revoke or suspend the authorization.

Publication of a list of Customs offices approved for performing TIR operations (Article 45 of the TIR Convention).

The national Customs Authority should publish the list of Customs offices at borders and inland that will be authorized to process TIR Carnets (i.e. Customs offices of departure and destination). The approved Customs offices should be selected on the basis that they service the main and most secure transit corridors in Pakistan as well as the main trade centres inside the country. Border-crossing Customs offices used for TIR operations should, where appropriate, be approved in conjunction with corresponding main border-crossing points (authorized TIR Customs offices) of the neighbouring countries.

However, there is no obligation to designate Customs offices of Exit / Entry for each land border with all its neighbouring countries. The designation of TIR authorised Customs offices is of the sole and sovereign competence of the State Authority.

The competent Customs authority is expected to provide the IRU with the necessary information and samples/ examples of Customs stamps to be applied on TIR Carnets. This information must be provided before TIR operations start in Pakistan in order that it can be distributed to all Customs authorities of Contracting parties and to the national TIR issuing and Guaranteeing Associations for control purposes.

For the selection of the Customs offices to be authorised to TIR procedures, and in order to ensure smooth and secure implementation of the TIR System, only Customs offices implementing the IRU TIR Risk Management tools must be designated. IRU is at disposal to assist the Competent Authorities in designating the future authorised Customs offices.

Customs Authority in partnership with IRU

To be defined

Awareness campaign for Customs officials in the functioning of the TIR System

Training is indispensable for the future smooth implementation of the TIR system. The IRU will provide both introductory and regular training sessions for its national Associations and their transporters. Representatives of the Competent Authorities, as appropriate may also participate in these sessions. Usually before admission to the TIR system is granted to the national Association the IRU organizes onsite training with the participation of all actors in the TIR system, including whenever appropriate the national Customs authorities.

In anticipation of those training events, it is recommended that Customs officials in place in the selected Customs offices authorised to TIR are given access to the Internet based World Customs Organisation (WCO) TIR Distance Learning package to familiarise themselves with the functioning and the handling of the TIR procedures.

Access should be requested by Pakistani Customs to the World Customs Organisation (WCO) in Brussels.

IRU, Customs Authority PNC-ICC Customs Authority

To be defined

Preparation for the implementation of the Annex 10 of the TIR Convention establishing electronic transmission by Customs authorities to the IRU of Real-Time information on termination of TIR Carnets in Pakistan (SafeTIR termination data)

These data must be transmitted in a standard format in respect of all TIR Carnets presented at Customs office(s) of destination, as defined in Article 1 of the Convention and its Annex 10.

The aim of this requirement is to ensure that both the TIR Carnet and the termination of the TIR operation are not tampered with. In other words, the termination certificate (the Customs stamp physically applied on the appropriate counterfoil of the TIR Carnet) and the electronically transmitted information by the competent Customs authorities must match in every point of the required data elements. It should be noted that without the ability to transmit SafeTIR termination data no national Association and hence, no TIR Contracting party, can become operational for the TIR procedure.

IRU, Customs Authority

To be defined

For this purpose, an annex to the Guarantee Agreement between the Customs and the national Association should be drawn up to set out the conditions under which Customs are due to provide such termination data to SafeTIR. This is a tripartite document that needs signatures of the competent Customs authority, the national TIR Association and the IRU. The IRU has a standard agreement (the SafeTIR Memorandum of Understanding) that can be made available to the national Association when the time is right.

The implementation of Real-Time SafeTIR will be realised in Pakistan in cooperation with IRU.

To allow SafeTIR data transmission, Customs Authorities will have to set up the appropriate telecommunication infrastructure:

IRU will provide Customs Authorities with the technical requirements.

Customs Authorities will configure their IT network accordingly (purchase of IT equipment, internet connection, …).

IRU and Customs Authorities will establish appropriate IT communication channel via a VPN.

To allow online checking of status of TIR Carnets, the IRU has developed a Web based application, CUTE-Wise, that Customs Authorities can use online and in Real-Time:

Customs Authorities will request to IRU the number of secured access to CUTE-Wise to be granted to designated Customs officials;

IRU will provide free of charge the required number of secured access to designated Customs officials.

Electronic TIR pre-declaration processing.

This requirement takes into account the latest security standard developments and WCO SAFE Framework requirements for advance cargo information. The IRU TIR Electronic Pre-Declaration (IRU TIR-EPD) will be implemented in partnership with Customs Authorities, as is the case in any countries.

IRU, Customs Authority

To be defined

Deployment at PNC-ICC Head Quarter of standard IT TIR software and Telecommunication means

PNC-ICC, on the basis of technical requirements provided by the IRU will have to implement standard IT TIR software and telecommunication means in order to ensure up-to-date and Real-Time control over the use of TIR Carnets.

To do so:

IRU will provide PNC-ICC with the technical requirements.

PNC-ICC will configure its IT network accordingly (purchase of IT equipment, Internet connection, …).

IRU and PNC-ICC will establish appropriate IT communication channel via a VPN.

IRU, PNC-ICC

To be defined

TIR training for PNC-ICC management and staff

IRU will organize for PNC-ICC management and staff several TIR training sessions in Geneva and in Pakistan, in order to ensure that all the procedures and use of IT tools are known, understood and implemented before PNC-ICC can start its TIR activities. Those training sessions will be as follows:

PNC-ICC Head of TIR and concerned staff: training on the functioning of the TIR system and on the use of AskTIR
(5 days in Geneva).

PNC-ICC, IRU

To be defined

IRU will furnish the necessary TIR IT software to PNC-ICC:

AskTIR: IT application that enables the implementation of a comprehensive intelligent IT management system encompassing the entire life cycle of TIR Carnets in accordance with the IRU rules and regulations.

IRU

To be defined

This system enables a great arsenal of risk management tools and automated management of TIR Claims. It incorporates features from the SafeTIRSystem, which enables data cross-checking against SafeTIR termination records transmitted by the respective Customs authorities at destination, as well as provides for sending reconciliation requests in case of detection of anomalies (mismatch of information).

CUTE-Wise is a Web based IT application developed by the IRU, in response to the Annex 10 of the TIR Convention, which provides Customs Administrations and Associations with the possibility of consulting the IRU’s TIR Carnet database. This application represents a simple and effective tool to assist in the implementation of risk management.

PNC-ICC Head of TIR and concerned staff: follow up TIR training
(2 days in Pakistan).

This session will be combined with training for TIR Holders and Customs officials.

PNC-ICC, IRU

To be defined

Selection and Admission of TIR Carnet Holders to the TIR system (Annex 9, Part II of the TIR Convention).

One of the most important roles and responsibility of PNC-ICC will be to carefully participate to the selection process in the framework of the National Authorisation Committee for the admission of TIR Carnet Holders to use the TIR Carnet in accordance with internationally and nationally approved procedures.

PNC-ICC will have to draft its internal procedures for access and suspension or exclusion of TIR Holders.

PNC-ICC and National Authorisation Committee

To be defined

TIR training for PNC-ICC, TIR Holders and Customs officials

This session will be dedicated to the practical handling of the TIR procedures by TIR Holders and Customs officials and to the role of PNC-ICC in the management of the TIR System in Pakistan
(3 to 4 days in Pakistan).

IRU, PNC-ICC, Customs Authority

To be defined

TIR Audit of PNC-ICC

In order to ensure that all equipment and procedures are in place at PNC-ICC, the IRU will carry out a TIR procedural Audit of PNC-ICC
(1 to 2 days in Pakistan immediately after the above-mentioned training session).

IRU and PNC-ICC

To be defined

Certificate of Insurance and authorization letter.

Upon completion of the admission program and following a positive audit report, the IRU Secretariat will submit its report to the competent IRU bodies and will solicit approval by the International Financial Institutions to activate the TIR guarantee in Pakistan to allow PNC-ICC to start its TIR activities.

Upon due approval, a Certificate of insurance will be issued by the International Financial Institutions in favour of PNC-ICC to confirm the start of the TIR coverage in Pakistan as from a given date.

The IRU will then issue an authorization letter to be addressed to all Customs authorities in Contracting parties and national TIR Associations. Six weeks following the issue of this authorization letter the concerned national Association and the Contracting party will be effectively TIR operational.

IRU

To be defined

Order by PNC-ICC to be delivered with TIR Carnets

Upon receipt of the above-mentioned authorisation letter, PNC-ICC will order using the appropriate standard form, the number and type of TIR Carnets it wants to be shipped by the IRU.

Implementation of Risk Management procedures by PNC-ICC and Customs Authorities

PNC-ICC will be responsible to closely monitor and manage the issuance of TIR Carnets to authorised Pakistani transport operators, the control of the proper use of these Carnets as well as their return to the IRU. To do so, PNC-ICC will apply and respect a set of procedures described in the procedural Manuals, starting with the requirements for safe order and storage of TIR Carnets, the application of preventive measures and computerised control over the movement of TIR Carnets and ending up with the electronic confirmation of termination of the TIR transport (the SafeTIR information referred to in Section III, point 9 above) and archiving of the TIR Carnets.

PNC-ICC

Ongoing from start date

Participation to IRU and UN TIR meetings

PNC-ICC will participate to IRU meetings and in particular to the IRU Commission on Customs Affairs and together with Customs Authorities, will be encouraged to participate to the UN TIR meetings (Working Party 30 and TIR Administrative Committee, as well as to relevant ECO transport and Customs meetings dealing with transit and transport facilitation.

IRU, PNC-ICC, Customs Authorities

Ongoing from start date

Assistance and Consulting

IRU is ready to meet with the Competent Authorities and Customs officials in Pakistan as soon as the accession instruments to the TIR Convention have been deposited to the UN Secretary General by the Government of Pakistan, in order to explain how the TIR system functions at present, to describe the security elements referred to above and to explain in more detail how the Customs authorities, the national Association and TIR Holders in Pakistan are expected to comply with the IT requirements permitting the exchange of electronic information regarding the implementation of the TIR System (SafeTIR real time transmission and electronic pre-declarations).

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